Ted Grant

Fight crisis with socialist policies

Tory
attacks on the social services, the sick and the poor, the offensive
against the trade unions through the Industrial Relations Act, have
been supplemented by measures in the interests of the rich and big
business. Reduction of surtax from 94 to 70 percent, reduction of
corporation tax from 45 to 40 percent, reduction of the tax on high
incomes have taken place side by side with the attacks on school
milk, prescriptions and the social services.

This
declaration of open class war by the representatives of the CBI and
big business has been forced on them by the crisis facing British
capitalism. The main complaint of big business has been against
wasteful state expenditure on social services and other items which
have pushed up the share of the gross national product swallowed up
by the state from 37 percent in 1959 to 50 percent last year. Of
course, they had not objected to the services rendered to big
business by expenditure on subsidies to industry and scientific
research which consume large sums. Nor have they criticised the over
£2,500 million spent on armaments, nor the burden of the national
debt, which parasitically swallows up about another £1,500-1,800
million a year.

Ten percent
inflation

With a
falling share of world exports and the balance of payments being
temporarily high because of favourable terms of trade, at the expense
of the under-developed world, the producers of raw materials and
food, the outlook for even the immediate future, let alone the
long-term future, is bleak. With an inflation continuing at the rate
of 10 percent, prices will rise, not only in Britain, but on the
world market and cancel out the temporary breathing space given by
devaluation.

US economy at
73 percent capacity

This year’s
Labour Party conference takes place at a time when the comfortable
myths of the post-war era have been shattered by the world currency
crisis. The theory put forward by the right wing of the labour
movement, that capitalism could be managed, and that the problems and
economic crises of the past had been dispelled forever, were
destroyed by the experience of the Labour government, and now by the
measures introduced by the American government. Nearly one million
unemployed in Britain and six million in America are a grim
foreshadowing of world developments. The measures undertaken by Nixon
are caused by the incapacity of American capitalism to solve its
problems by internal means alone. America wishes to put the burden of
its insoluble dilemma on Japan and Western Europe. This means that
there will be less leeway for Britain to find a road out of its
problems by exporting.

The
American economy is only being worked up to 73 percent of capacity.
The attempt to use Keynesian means of “reflating” the economy,
accepted in desperation by the Republican Nixon, did not get the
results desired. Nor did the measures of Friedmanism, which were
imposed as an alternative. The attempt to juggle with the money
supply, as could have been forecast with an elementary knowledge of
Marxist economics, neither prevented continuing inflation nor a
paralysis of the economy. Investment fell, prices continued to rise,
the economy remained slack and unemployment has increased. It is
these factors, as well as the colossal deficit in the balance of
payments which has dictated America’s changed policy on the world
market.

Common Market
no solution

The Tory
government’s panacea for Britain’s economic ills, entry into the
Common Market, has already been exploded by America’s actions,
which have provoked a split between France and Germany as to how to
face up to their more powerful rival. Britain’s entry would merely
add another element of discord between the big Common Market powers.
It cannot solve their problems. Neither would non-entry solve the
problems of British capitalism.

Consequently,
the perspective before the labour movement and the working class is a
grim one indeed. Investment in Britain is still falling. For the
first seven months of this year it was lower than the catastrophic
figures of previous years. These were already much lower than the
same period last year. And these were already much lower than the
figures of previous years.

There is an
11 percent fall in investment and a 43 percent fall in production of
machine tools, probably more than half for the British market.
Productive capacity of industry generally is not used more than 60
percent. This is the background to a disastrous fall in the rate of
profit, of about 25 percent in ten years. During the last year, a
further fall from 13 percent profit to 11 percent took place. On top
of this, the amount of profit of the big companies has fallen from
£4,500 million in 1969 to £4,000 million in 1970.

Logic of
capitalism

This is the
explanation for the vicious measures of the Tory cabinet. Heath,
Barber, Davies and Maudling have undertaken their retrenchment
policies because of this situation. It is totally false, and can give
an entirely misleading impression, to use the arguments of the Labour
leaders, of Wilson, Jenkins, and of the Lefts, Foot, Mikardo and
others, that the Tory representatives of the C.B.I. behave in this
fashion because Heath is vain, Davies is doctrinaire, Maudling is
harsh and Barber is callous. Undoubtedly all this is true, but these
acts provoke the resentment and resistance of the working class,
which big business would prefer to avoid if they could. It is the
logic of capitalism and its economic laws which have the ruling class
in their grip.

Production
for profit not use

Davies’
argument that higher production would have meant more employment and
therefore less unemployment must sound like a death-bed joke to the
tens of thousands faced with redundancy notices at the present time
and the hundreds of thousands who are in the dole queues. There is a
fallacy that more production means more work under capitalism, as
demonstrated at the UCS where the workers nearly doubled their output
after thousands had been sacked. This arises because the purpose of
capitalist production is not the production of goods that are
required, but purely for profit. In the classical socialist phrase,
production for profit and not for use.

It is in
this situation that the T&GWU and the AUEW have come out for
demands which include a 35 hour week, a month’s holiday with pay,
raising pensions, a £20 minimum wage and other modest demands.

Learn from
past experience

The rising
tide of disgust with Tory policies is reflected in the by-election
votes, where Labour’s percentages steadily increased and the
Tories’ have fallen. Demands for revolutionary inroads into
capitalism are reflected in the unanimous vote at the TUC and a big
majority of Labour’s NEC for the re-nationalisation of the
profitable hived-off sections of nationalised industry, without
compensation to the looters of the state economy. It is also
reflected in the demands for a whole series of reforms put forward by
the Labour leadership.

However,
the leadership have learned nothing from the bitter experience of
1964-70. Demands for reflation put forward by the TUC and the Labour
Party leadership are entirely impractical and utopian on the
background sketched above. The hankering, in an ambiguous way, by
members of the shadow cabinet, including Wilson and Castle, for a
return to a prices and incomes policy is an indication of this. If we
start from the fundamental proposition that profit is the unpaid
labour of the working class, and that the share of the capitalists
can only be increased by cutting down the share of the working class,
we will see the flaw in the reasoning which has already been proved
by experience.

Strike of
capital

However,
even the left Labour and trade union leaders have the same naïve
illusions in the possibility of running capitalism better than the
capitalists. Attempts to do this will always fail against the
resistance of the financiers, industrialists and landlords. Wilson
has spoken of a strike of capital against the last Labour government,
of which we heard only after Labour lost power. The next Labour
government will be faced with even greater pressure by big business.
They will sabotage any attempt to carry through reforms in education,
housing, social services, rents, higher wages and lower hours, which
would mean a further cut in already falling profits.

Socialist
plan

Consequently
the next Labour government would be a government of crisis right from
the start. Either they will be prepared to take over the commanding
heights of the economy and run them in the interests of the working
people, or they will have to capitulate, as did the last Labour
government, to the needs and interests of big business.